Gap Insurance in Louisiana (2025)

Gap insurance, or guaranteed asset protection, is an optional type of car insurance you can buy if you finance or lease your vehicle. If something damages your car or someone steals it, this coverage pays the difference between your loan balance and your insurance claim payout. You should consider buying gap insurance if you owe more on your car than it’s currently worth. 

Some lenders and lease companies require gap insurance as a condition of the financing agreement. Here’s what you need to know about finding gap insurance in Louisiana.

How gap insurance works

If your insurer deems your car a total loss — or if someone steals your vehicle — gap insurance can kick in after your insurance company pays out your collision and comprehensive coverage claim. Gap insurance can help pay the remaining amount you owe on your car loan or lease.

While collision or comprehensive insurance will cover the cost of the car’s actual cash value (ACV) of your car, minus your deductible, this might not cover the amount you still owe because of depreciation. After a year, new cars typically lose 20% of their value.1

To avoid paying out of pocket, you can purchase gap insurance coverage from the dealership or an insurance company when you buy or lease a vehicle.

What gap insurance covers in Louisiana

Gap insurance in Louisiana covers the difference between the amount of your claim payout and what you owe on your car loan or lease if you total your vehicle. For example, let’s say you get in a crash that totals your car, the insurance company finds that the current market value of the vehicle is $20,000, and you still owe $25,000 on your loan.

After your $1,000 deductible, your insurance company pays you $19,000 to cover the cost, leaving you with a remaining $6,000. If you have gap insurance, this will help cover the remaining $6,000. Without gap insurance, you’ll have to pay out of pocket.

Best gap insurance companies in Louisiana 

The best insurance companies provide quality coverage, have high customer satisfaction ratings, and earn high Insurify Quality (IQ) Scores. Here are the best gap insurance companies in Louisiana.

USAA

Allstate

Progressive

Gap insurance vs. full coverage

Full-coverage car insurance in the state of Louisiana can include a combination of collision, comprehensive, liability, and medical payments insurance.2 It doesn’t include gap insurance in Louisiana or elsewhere. Instead, you should use gap insurance in combination with your full-coverage policy.

Dealerships and car insurance companies typically sell gap insurance as an optional insurance product. Some car dealerships might require you to purchase gap coverage if you have a loan or lease on your vehicle. It’s a good idea to purchase gap insurance to avoid out-of-pocket payments if you total your car in an accident.

Who needs gap insurance in Louisiana?

Louisiana state law doesn’t require drivers to purchase gap insurance. But if you purchase or lease a new vehicle, the value depreciates quickly. Within the first year of having a new car, your vehicle will likely lose 20% of its value. If you total a leased or financed vehicle, you may owe more than what your insurance company will cover based on the car’s value. 

You should consider purchasing gap insurance in Louisiana if any of the following apply to your situation:

• You made a small down payment (less than 20%) on the vehicle.

• You financed the vehicle for 60 months or longer.

• You leased the car.

• You purchased a vehicle that depreciates at a faster-than-average rate.

• You rolled negative equity from a previous car loan into a new loan.

• You put many miles on your vehicle, as this can cause depreciation.

Gap insurance might not make sense if:

• You made a large down payment on your vehicle.

• You plan to pay off your loan in a short period of time.

• You purchased a used car without financing it.

Before you commit to gap insurance, you should consult a car insurance agent or an auto loan lender to decide if this coverage makes sense for you.

How to buy gap insurance in Louisiana 

If you purchase a new car in Louisiana, most dealerships will offer gap insurance. Many insurance companies also offer gap insurance and usually charge less than the dealership.

Adding gap insurance to your collision and comprehensive coverage through your car insurance company only adds about $20 a year to your annual premium, according to the Insurance Information Institute.

While it’s possible to buy gap insurance as a stand-alone policy, most insurers include it as an add-on to your existing auto insurance policy.

Gap insurance in Louisiana FAQs